Reaching for the stars: the story of the higher rate pensioner

When a former client telephones you ten years after you ceased to act for him your mind adopts an air of curiosity about the raison d’être for the call. And if the client is 88 years of age and says ‘hello Neil I think I’ve got a tax problem’ your attention levels inevitably increase by another notch. Did I make an error on his last tax return that HMRC has spotted a decade later? After all his obligation to complete self-assessment returns ended when he sold his final buy-to-let rental property. That was a long time ago.

‘Am I a higher rate taxpayer?’

Let’s call my former client John. He spent 36 years working as an engineer for a well-known telecommunications company so he has an index-linked pension that will be £18 582 for the tax year ended 5 April 2024. Focus on the...